Kentucky's Budget Crunch
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Morehead State and the 2010-12 Budget

Briefing No. 3 by President Wayne D. Andrews

TO: Regents, Faculty, Staff, Students, Parents, Alumni, and Other Citizens

DATE:  March 12, 2010

Today I am updating you on the most important development thus far in the state budget process for the 2010-12 biennium. 

This is the third of a series of budget briefings I am providing via e-mail and postings on the University’s Web site at the following link: www2.moreheadstate.edu/budgetcrunch.

After nearly four hours of intense, partisan debate Wednesday, the Kentucky House passed a $17.5 billion, two-year budget along a party-line vote of 65-33 and sent it to the Senate.  The proposal cuts spending in most state agencies and public education in an effort to erase a revenue shortfall of more than $1.2 billion.   

For Morehead State, the new state budget at this point is a mixed bag of cuts.

MSU and the rest of public higher education face a 1.5 percent cut in the first year of the budget and a one percent cut in the second year, a total impact of about $1.2 million on this institution.  It could have been worse and might become so if the Senate doesn’t agree with the House’s revenue plan for 2010-12.

The $1.3 billion in state bonds for construction of schools, water and sewer lines, roads and other capital projects does not include one cent for MSU and five other universities.  KCTCS and two universities would have projects funded, however.  House members apparently feel that most of the money should be spent on replacing dilapidated public school buildings and upgrading community infrastructure.  We have legitimate needs in capital construction and equipment but it is hard to argue against safe drinking water and safe, modern school buildings for the children of this state. Sadly, our state cannot afford to fund all of the needs in this tough economic climate.
   
No institution will receive maintenance and operating (M&O) funds for new facilities already in use or becoming available in the next two years.  That decision alone will cost us $2.9 million as we open the Center for Health, Education and Research and the Student Recreation and Wellness Center.  We already are trying to absorb the costs of the Space Science facility and the Equine Health Education Center which were finished last summer.

In terms of what happens next, it is important for us to get some indication  what the Senate leadership plans to do with the House budget bill.  Toward that end, I will be having conversations with key senators over the next few days. 

We know that the two chambers, each controlled by a different political party, have major philosophical differences that have influenced state budget policy for several years.  In recent years, those differences have resulted in a deadlock that forces the budgetmaking process into a conference committee at the end of the session.  If that happens, no one can say what will happen.

I appreciate those who are sending questions and/or comments to me using our online Budget Suggestion Form.  

My next briefing will be an overview of the factors other than the state budget and tuition rates which directly affect our internal budgeting.  As I have said many times, our shared goal is to continue our progress toward greatness.

For those who will be away next week, I hope you have a safe and pleasant spring break.  

Thanks again to everyone who supports this wonderful institution.